Category: Manufacturing

Supply Chain News: What Countries are Most Ready for Robots and AI?

New Study from The Economist Ranks South Korea on Top, US in Ninth Place

May 2, 2018

SCDigest Editorial Staff

We are in the early stages of a new era of automation. Which countries are best positioned to take advantage of these disruptive technologies?

The Economist Magazine's Intelligence Unit hopes to answer that question with the release of a new Automation Readiness Index, which compares countries on their preparedness for the age of intelligent automation.

Supply Chain Digest Says...

In the end, it says, "Policy should not wait for too long, because the business world is moving ahead with automation at speed."

What do you say?

We've of course have had many other waves of technology advances, from the Industrial Revolution to the Information age, and every time there have been widespread fears about the impact on society and especially work and jobs. In every case, the progress has added to societal wealth, with an increase in jobs even as some types of work are automated away.

But there really may be something different in this new technology wave, the new report on the subject from The Economist says.

"Traditionally technologies have automated a range of tasks that humans might not have wanted to do or might not have defined them as humans," Elizabeth Fordham, senior advisor for global relations in the OECD's Directorate for Education and Skills, says in the report "AI and robotics, however, are starting to automate higher order, non-routine tasks, some of which require critical thinking and creativity."

Adds Lorenzo Fioramonti, professor of political economy, University of Pretoria and another member of the report's expert panel, notes that ""The major difference with the past is that today's automation technologies are highly intelligent and able to learn."

But regardless of these larger level issues, businesses are charging ahead, the report notes.

"Such anxieties as they have about these technologies are more about being caught out by market disruption," the report says. "Thus many are speeding ahead to integrate AI or advanced robotics into their operations. That pace will accelerate in the next few years, and the actual impacts on economies and workforces will begin then to become clearer."

Everyone seems to agree major changes to work and jobs are coming, even if insight into the likely results and timing remain very vague.

There is though a wide range of opinion on the impact on jobs. The report notes estimates of potential job losses due to automation range from an oft-cited figure of 47% for the US to more conservative estimates of around 9% for OECD countries.

But among the export panel, Alex Manning, professor of economics, London School of Economics, believes the net impact on jobs of AI, robotics and other automation technologies will be zero, as new jobs will be created that offset the elimination of older ones. Similarly, James Bessen, a professor of economics at Boston University, believes that such automation may well create more jobs than it eliminates.

Regardless, the report says that governments will need to put policies and plans to help individuals - and to some extent businesses - take maximum advantage of the opportunities that these technologies offer. But it notes policies will also be needed to mitigate the negative impacts resulting from the displacement of some categories of workers from their current jobs.

Thus comes the development of the Automation Readiness Index, which compares countries on their preparedness for the age of intelligent automation, analyzing the existence of policy and strategy in the areas of innovation, education and the labor market.

Overall, it finds that "little policy is in place today that specifically addresses the challenges of AI- and robotics-based automation.

The index provides a snapshot across a set of 25 countries of current government-led efforts to anticipate the resulting changes and shape the outcomes of technological progress. The research based on 52 indicators (both qualitative and quantitative) that were determined through consultation with the aforementioned panel of experts. The majority of the indicators were scored by The Economist Intelligence Unit and are based on the examination of publicly available sources and expert interviews.

As shown in the graphic below, South Korea tops the overall list, with an index score of 91.3, followed by Germany and Singapore.

Source: The Economist

As can be seen, the US came in 9th place.

The report then breaks out country scores for the three individual areas that are combined to calculate the composite score.

The report concludes by saying he dearth of policy development thus far to address intelligent automation does not really result from government laziness or inattention. It has more to do with the enormous number of unknowns about precisely how automation technologies will affect the workforce and what types of responses will be effective.

Societies are therefore in for a long period of trial and error before something approaching "best practice" begins to emerge from country experiments. It says some experts believe that many lessons need to be learned and shared before strategic plans to address automation can be detailed.

It adds that such experiments are under way in a handful of countries but are yet to yield clear results. For example, it cites the Singapore government's effort to nudge its citizens toward voluntary, lifelong skills development, which is attracting international attention, but experts warn that it may not generate the desired results. Even if it does, the lessons may not be applicable in other countries.

But in the end, it says, "Policy should not wait for too long, because the business world is moving ahead with automation at speed."